Identity crime is a rapidly growing offence that has the potential to hit property investors hard. Matthew Liddy.
Imagine finding that a fraudster has stolen your identity and transferred ownership of your home or investment property into another name, and then on-sold the property to another party. Suddenly, you don't own your property anymore, even though you knew nothing about the transaction.
Imagine it's then you who's responsible for proving that you didn't carry out the property transfer even though it was made by someone possessing identification in your name.
This is one of the extreme scenarios Australian homeowners have found themselves in due to the rapidly growing crime phenomenon of identity theft, according to Detective Acting Sergeant Rod Shelton from the Fraud and Corporate Crime Group of the Queensland Police Service.
Identity fraud is estimated to cost Australian businesses and financial institutions more than $3 billion a year. The cost to individuals who have their identities stolen can also be great, both financially and emotionally.
What is identity theft?
Identity theft is "the use of another's identity, whether dead or alive, for dishonest purposes", Shelton explains, adding that it's one of the fastest-growing crimes in the world.
Identity crimes come in many different shapes and guises. It can be as simple as someone memorising documents and PINs over your shoulder at the shopping centre, or as complicated as an organised crime syndicate paying individuals to break into your home and steal identifying materials.
Once a criminal has access to your identity, they might use it to fraudulently obtain money, loans, finance and credit in your name.
"Once you've got a false identity, you can then start to get loans and never have to pay them back," Shelton says. "You can even get housing loans. The banks are always showing us examples of people going in with fraudulent documents to get housing loans."
As well as taking out new loans in your name, identity fraudsters may access your existing accounts, withdrawing funds, or may even transfer your property to somebody else.
"I could obtain your property details and then complete the necessary transfer papers using a forged driver's licence as identification and transfer the property into another fictitious identity. I would even be prepared to pay for the transfer duty. And I would then sell the property to some unsuspecting third party, pocket the money and disappear," Shelton says.
He adds, "Any business transaction that can be conducted can have someone using a false ID to the detriment of you, whether it's property, shares, bank loans, anything like that."
Shelton says criminals are getting more inventive with ways to steal people's identity.
"We're finding now there's a bit of an increase in burglaries happening not to get property but to get identifying documents," he reveals. "It's a bit hard to walk out of someone's place now with a huge plasma TV and run down to the secondhand store.
"It's much easier to get identifying documents. Your Energex (electricity) account sitting on the fridge waiting to be paid is worth 25 points in the 100-point scale of identification. If someone breaks into your house and they get that, maybe your Telstra account, go through your bedside table and find your birth certificate or your passport - there's 100 points and they can go out and steal your identity."
Organised crime syndicates are already paying low-level criminals to conduct these sorts of break-ins, Shelton says. Similarly, they sometimes pay employees to steal customer information from companies' databases, using technologies such as USB sticks and iPods.
"There was a group caught down in Sydney recently and they'd corrupted two bank tellers to literally walk out with customers' details and sell it to them," Shelton says.
The internet is a ready tool for identity thieves, and forging documents has also become much easier with advancement in technology.
"Our kids nowadays, even just pre-teens, are able to do anything on a computer - scan in a birth certificate, driver's licence, falsify it and print it out again. While it might not fool the experts, most people will be fooled by it.
"Some of the documents we're seeing now are very good forgeries which will fool all but our document examiners."
What's the cost?
Identity fraud can cost you not just money but also time and your reputation. In fact, Shelton says money may end up being the least of your worries. You may end up being suspected of committing a crime. "If a crime is committed in your name, you're suspected of committing that crime," he says. "You're the person we'll hunt."
Further, your reputation in the eyes of financial institutions could be shattered.
"Your credit rating is something that's vital if you're going to get any sort of loan, even buying a mobile phone. For some people, the first time they know that somebody's taken their identity is when they go to apply for a mobile phone or a credit card and they're knocked back."
It's then up to you to prove to the police - and to financial institutions - that it wasn't you who committed that crime or made those purchases.
"If someone actually stole your identity and transferred your property into their name, and then sold it on, you've got to go through the whole process of working backwards to prove it wasn't you and then work to reclaim your property," Shelton says.
"You might even have to employ a private investigator or a forensic computer expert or forensic accountant to go back and work the whole thing out. It's going to take you a lot of time and a lot of money to do this."
He adds, "From the US experience, we believe that it can cost up to $10,000 and possibly take two years to clear your name because every time an account is opened up in your name, you have to swear an affidavit to say it wasn't you. You've got to convince the banks and/or police that you weren't the one who committed the crime. Sometimes that can be extremely hard and extremely stressful."
How do you minimise the risk?
Shelton says there are a number of steps property investors can take to make the job of identity thieves harder:
Get a copy of your credit card statement and check it.
"Make sure that everything on there is something that you have bought," Shelton advises. "If you see that something strange has been bought, like a meal in England or clothing in the US, and it wasn't your transaction then get onto your bank straight away."
Use different PINs and passwords on all your accounts and keep them private.
Secure your personal information such that if someone breaks into your house, they can't easily get their hands on documents such as bills, birth certificates and passports.
"You really want to stop the opportunist criminal who gets in and wants to be in and out of your house in 30 seconds. They're not going to spend five minutes trying to crack the safe," Shelton says.
Also, don't carry key personal documents with you unless you need to. If you lose your wallet, call your bank immediately and freeze or cancel your accounts.
Destroy personal information using a shredder before you dispose of it.
Secure your mail with a lock-up letterbox.
Limit the amount of credit you have in accounts.
"If you're doing internet banking, if you're buying on eBay or anything like that - any internet transactions - limit the amount that you have in the account," Shelton says.
Beware of shoulder surfers - people who may memorise your PINs or personal details by watching you at an ATM or at your bank.
Keep an eye on your credit card at all times. Don't let anyone at a shop, service station or restaurant take your credit card out of sight. Skimmers used to steal the details off cards are now as small as a book of matches, and it takes just a moment to skim the information from your card.
Never give out personal information, such as credit card numbers, over the phone if you've been cold-called, even if the person purports to be from a charity or bank. They may not be who they say they are. If you want to give such information over the phone, find the organisation's number yourself and call them, Shelton says.
He says the police are also working with government agencies to tighten the controls around the provision of identifying information and what identification is needed to complete transactions. They're also delivering training and education presentations to public and business organisations.
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